What could be the biggest multilateral financial rescue ever attempted is on the horizon for Greece.
The debt-stricken nation has been offered up to 30 billion euros in emergency loans from fellow euro zone members. In addition, at least 10 billion euros is expected from the IMF.
Hailing the huge lifeline as a sign of confidence in its efforts to overcome the crisis, Athens says it does not need it, at this stage.
“The government has not asked for the activation of the aid mechanism,” Greek Finance Minister George Papaconstantinou told reporters.
“We believe we will be able to continue to borrow smoothly from the markets.”
The euro zone’s plan was approved in an emergency teleconference. The 3-year loans would carry an interest rate of around five per cent, well below current market rates.
The Chairman of the Eurogroup of finance ministers, Jean-Claude Juncker, confirmed the latest budgetary data from Greece is seen as encouraging. He said it indicates that “consolidation measures decided upon by Greece’s parliament and government are indeed having an effect.”
Greece has imposed tough austerity measures to slash the public deficit. Athens will be hoping details of the EU offer will soothe markets after investors last week sent Greek borrowing costs spiralling.